P W Heap Esq CMG BTC Hong Kong
Dear Peter,
EDUCATION TRUST FUND
CONFIDENTIAL
Foreign and Commonwealth Office
London SW1A 2AH
HKEB
290
ECEIVED IN
MARAFJ
12 JUN 1990
5 June 1990
ES
INDE
ГЎ
File.
sorry
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1. I am sorry not to have replied sooner to your letters of 26 February and 26 March about the Education Trust Fund. As we assumed you would have heard from Julian Davey, by the time your first letter had arrived, the Council had already decided to drop the idea of the Education Trust Fund so that the question of your becoming a trustee was no longer an actual one.
2.
You may, nevertheless, be interested to know the background to this decision. The proposal was not in fact vetoed by the Treasury but was withdrawn by the British Council on advice from Finance Department and Cultural Relations Department before being put to the Treasury.
3.
The Council's original intention was to contribute £250,000 from project revenue earned in Hong Kong and a further £500,000 from last year's PES award towards the establishment of an Education Trust Fund which would provide scholarships for post-graduate studies and professional training in the UK. Council's contribution was seen as priming the pump to attract funds from private sponsors.
4.
The
Problems arose, however, because the Council was anxious to set up the Trust Fund by 31 March 1990 in order to use the funding available in FY 1989/90. When the Council consulted us about this proposal at the end of February, Finance Department pointed out that if such a large sum was to be invested in a trust fund, the Treasury would also have to be consulted and were likely to question the propriety of grant-in-aid funds being spent in such an arms-length fashion. To be convinced of the value of the scheme, the Treasury would need a great deal more detail than the Council had prepared and were likely to ask why we had not made clear to them from the beginning that PES money was to be used in this way.
This might in turn complicate our negotiations with the Treasury over this year's PES bid. Following a British Council Board meeting on 6 March, John Hanson, the Council's Deputy Director General decided that the Education Trust Fund proposal should therefore be withdrawn. He said that the Fund would not be
CONFIDENTIAL
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